African Mining Network

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AMN - NIGERIA: Thor secures US$78 million from AFC

After receiving investment committee approval from the Africa Finance Corporation (AFC) Thor Explorations Ltd has executed a term sheet for a US$78 million financing package. The AFC package will assist in the construction and ramp-up of Thor's 100%-owned Segilola Gold Project in Nigeria.

This term sheet follows completion of the project Definitive Feasibility Study (DFS) announced on February 4, 2019.

The financing is subject to mutually satisfactory documentation, AFC Board approval, completion of due diligence and other customary conditions precedent which are expected to be completed in May 2019.

Subsequently, Thor has received a commitment from Norinco International Cooperation Limited for 10% financing of the US$65 million lump-sum turnkey, engineering, procurement and construction (EPC) value awarded to Norinco for the development of Segilola. This increases the funding approvals to US$84.5 million.

The AFC funding package of US$78 million includes a US$54 million senior secured credit facility, a US$9 million gold stream prepayment and a US$15 million equity investment from AFC.

This agreement introduces a new strategic investor into Thor in AFC, a pan-African multilateral development finance institution.

Thor is now proceeding with turnkey engineering procurement and construction (EPC) contract finalisation and start of construction works with first production targeted within 18 months of EPC commencement.

For the company to be fully funded to production, including financing costs, cost overrun capacity, general corporate purposes and other exploration activities during the construction period, Thor will also be seeking to raise an additional US$18 million from debt or equity sources.

Thor Explorations president and CEO Segun Lawson said: "This is an extremely significant milestone for Thor and for the mining sector of Nigeria. Our DFS demonstrated the robustness of the Segilola Gold Project and now we are pleased and looking forward to partnering with AFC as both a lender and a long-term shareholder of Thor.

"Our vision for the Segilola project is aligned and we look forward to successfully implementing this landmark project in Nigeria."

Thor Explorations is a Canadian mineral exploration company engaged in the acquisition, exploration and development of mineral properties in Nigeria, Senegal and Burkina Faso.

It holds a 100% interest in the Segilola project in Osun State of Nigeria and a 70% interest in the Douta Gold Project in southeast Senegal. Thor also holds a 49% interest in the Bongui and Legue gold permits in southwest Burkina Faso.

Africa Finance Corporation, an investment-grade multilateral finance institution, was established in 2007 with an equity capital base of US$1 billion, to be the catalyst for private-sector-led infrastructure investment across Africa.

AFC has a current balance sheet size of about US$4.5 billion and is the second-highest investment-grade-rated multilateral financial institution in Africa with an A3 (Stable outlook) rating from Moody's Investors Service.

AFC invests in high-quality infrastructure assets in Africa that provide essential services in the core infrastructure sectors of power, natural resources, heavy industry, transport and telecommunications.